S&P Global Ratings affirmed its 'AA-' rating on the city of Huntsville, Ala.'s electric revenue bonds. The outlook is stable. The net revenue of the city's electric system secures the bonds. At fiscal year-end 2020, the utility had $75 million of electric system debt outstanding. The rating reflects our view of Huntsville Utilities' (HU) very strong enterprise risk profile, highlighted by its deep and diverse service area, its role as a distributor of Tennessee Valley Authority (TVA) power (which we believe reduces Huntsville's operating risk), and its low rates. In our view, Huntsville's financial risk profile is slightly weaker, with stable, but thin liquidity and fixed cost coverage (FCC), but low debt and limited capital needs that are expected to
